NICE Proprietary & Confidential 1

Clean Coal Applications: NICE Perspectives

Chang Wei National Institute of Clean-and-Low-Carbon Energy (NICE) Shenhua Group

NICE Proprietary & Confidential 2

China Energy Group Overview

• The largest coal supplier (~500MT)

• The largest coal-fired power generation company (~190GW)

• The largest wind power provider (~33GW)

• The largest coal-to-chemical producer (~8MMT)

• Vertically integrated businesses - coal mining, transportation, coal-to-chemicals, power generation

• Diversified energy portfolio - coal, wind, gas, solar

One of the largest energy company transforming to

one of the best clean energy companies

NICE Proprietary & Confidential 3

NICE Overview

HQ based in Beijing, China

North American Technology Center

(Silicon Valley, US)

European Technology Center

(Schwabich Hall, Germany)

• 3 R&D locations

• 600+ Employees

Focusing on Clean Energy Technology Development

NICE Proprietary & Confidential 4

Energy Mix in China Energy Production in China (1990-2015) Energy Consumption in China (1990-2015)

-5

0

5

10

15

20

0

10

20

30

40

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

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2004

2005

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2007

2008

2009

2010

2011

2012

2013

2014

2015

%

0

5

10

15

20

0

10

20

30

40

50

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

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2005

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2007

2008

2009

2010

2011

2012

2013

2014

2015

% • Energy Production in 2015: 3.6 BTCE • Annual Average Energy Growth (1990-2015): 5%

Coal

Oil NG

Renewables

Billon Ton Coal Equivalent (BTCE)

In China

4

3

2

1

5

4

3

2

1

Billon Ton Coal Equivalent (BTCE)

Coal

Oil

NG Renewables

• Energy Consumption in 2015: 4.3 BTCE • Annual Average Energy Growth (1990-2015): 6%

oil 19%

hydroelectric power

9%

natural gas 6%

coal 62%

nuclear 1%

other renewables

3%

2016 China energy consumption 2011 China energy consumption

• Energy Consumption > Energy Production

• Coal contribution over 60% today

• Rapid growth of renewables but still a small presence (3%)

Clean Coal Technologies critical

hydro 6%

hydro 9%

Source: BP Statistical Review of World Energy

China Statistical Yearbook, 2016 China Statistical Yearbook, 2016

NICE Proprietary & Confidential 5

Clean Coal Technology Strategy

Cleaner Power Generation Better Fuel Choice More Value-added Conversions

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Cleaner Power Generations

Ultra-low Emission Power Generation

Emission Control

CO2 Capture, Storage and Utilization

CO2 Mitigation

Zero Liquid Discharge, Saleable Salts

FGD Wastewater Reuse

Value-added Products, Minimal Fly Ash Disposal

Solid Waste Management

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Two thirds of power plants implemented with ULE Technologies

EP indicator

Soot (mg/Nm3)

SO2 (mg/Nm3)

NOx (mg/Nm3)

National standard (Natural Gas) ≤5 ≤35 ≤50

Shenhua demo plant <2 <5 <20 Selective catalytic

reduction

Flue gas desulfuration

Cleaner Power Generation…Ultra Low Emission (ULE)

Ultra Low Emission: Soot, NOx, SO2

Effects of ULE on haze (Jing-Jin-Ji Area) 100% ULE No ULE Difference

8% avg reduction

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Gasif

ier

Syngas cleanup

SOFC

ST ASU

CO2

O2

Coal

Oxy comb

HRSG

Air

Air

O2

S, PM, Hg

Company-wide Adoption Shenhua Demonstration Project A Major R&D Program

Without CO2 capture Partial CO2 capture Close to 100% CO2 capture

Near-term: Ultra-low Emission

Long-term: Integrated Gasification Fuel Cell

Power Generation (IGFC)

Mid-term: Post-combustion capture

Cleaner Power Generation…CO2 Mitigation

NICE Proprietary & Confidential 9

CaSO4 Reduced sludge Reclaimed water Reclaimed water

Pretreatment Preconcentration Membrane based

extreme concentration

Crystallization FGD wastewater

NaCl

Technology Features • Only partial softening in pretreatment 50-70% lower chemical cost

• Membrane concentration up to 18-20% in TDS 80-90% less evaporation

• Saleable salts…minimal solid waste

Technology Status • Pilot Projects Completed • Commercial launch underway

Cleaner Power Generation…Wastewater Reuse

Capex & Opex comparison

opex capex

Existing process 1 Existing process 2 NICE technology

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• Low carbon mortar (fly ash loading 30%-45%)

• Green cement

• Insulation and fire-resistant Foam

• Functional filler for polymers

• High-end industrial ceramics

Coal combustion solid waste:

fly ash

• Aluminium and by-products

Cleaner Power Generation…Fly Ash Utilization Technologies

• High strength proppants

~100% Fly Ash Utilization

Structural ceramic technology

Alumina extraction technology

NICE classification and utilization technology

High volume

High value

Al rich fly ash

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Global energy trend: increasing H/C ratio

H:5%

H:10%

H:25%

Better Fuel Choice: Coal as A Secondary Energy Source

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Hydrogen Energy Value Chain

Storage & Charging Consumption Shipping Production

NICE Proprietary & Confidential 13

Hydrogen Production…Cost Comparison

Coal-based Methanol

Natural Gas

… H2

Electrolysis

Coal

Curtailed Wind

Nuclear Energy

Centralized Distributed

H2 Production Technology

Coal to H2…low cost route

H2 Production Cost

NICE Proprietary & Confidential 14

Production

Storage & transport

H2 refueling station

FC vehicles

Hydrogen Energy…China Energy Group Strategy

• Drive low-cost production

with coal and curtailed wind

• Leverage Shenhua

transportation network

• Focus on investment and

ownership

• Build external partnership

NICE Proprietary & Confidential 15

More Value-added Conversions: Coal as Raw Materials

Coal Gasification

Liquefaction

MTO/MTPB

FT/Oil Hydrotreating

Coal-based Intermediates

MeOH

Liquid Fuels

Commodity Chemicals

Specialty Materials

NICE Proprietary & Confidential 16

Coal as Raw Materials…Commodity Materials

Coal to Olefins: ~3MMT/year

“Breakless” grade material with flame retardant properties

Coal to Liquid: ~5MMT/year

Cross-linkable polymer with high impact

resistance

Value-added Materials

Start-up Company

NICE Proprietary & Confidential 17

Technical Advantages

• Fast charge Capability (5 min to 80%)

• Long cycle life (>5000 cycles at 5C)

• Superior low temperature performance (5X better at -40oC)

• Balanced energy density and power rating

Coal

Coal as Raw Materials…High Power Lithium Battery Material

High power LIB

02468

10Energy density

Power density

Fast chargecapability

Cycle life

Supplier ASupplier BSupplier CNICE

NICE Proprietary & Confidential 18

Coal as Raw Materials…Thermal Management Materials

• High thermal conductivity - Block/Fiber: 300-680W/(m•K);

Foam: 100W/(m•K)

• Light weight, Density: 0.5–0.2g/cm3

• Excellent processability and high-temperature stability

• Low cost

Technical Advantages

• Heat dissipation of electronic devices

• Heat storage

• Fillers for thermally conductive composites

• Intelligent thermostatic devices

Applications

Carbon block Carbon fiber Carbon foam Coal based intermediate product

0

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500

600

700

0 2 4 6 8 10 12

Ther

mal

co

nduc

tivi

ty

W/(

m•K

)

Density g/cm3

Cu Ag

Al

SiC BN

Carbon Block

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Summary

Coal is a major energy source today

Coal will continue to be an important energy component

in the foreseeable future

Coal applications need to be clean and can be cleaner

Technology innovation will drive economics